There’s no doubt that mountain bike sales have been going through a boom over recent years.
To our industry’s collective disadvantage, unlike the USA and Europe, in Australia we don’t collaborate to produce sales statistics broken down to type of bike. Therefore this article can only be based upon anecdotal evidence from within Australia and hard data from overseas.
But that Australian anecdotal evidence is strong and consistent… mountain bike sales have been super strong, only constrained by a lack of stock.
The critical question for dealers as they place their new season orders is, ‘Will this trend continue?’
Our prediction in answer to this question is, ‘Yes!’ This is not just based upon wishful thinking, but five key drivers that outweigh the negatives that we can identify.
Before we examine these in detail, firstly let’s clarify that this article is referring to ‘genuine mountain bikes’ which is something very difficult to define by price point or description, but broadly speaking means bikes that are designed for and capable of being enjoyably ridden on mountain bike trails. This excludes very low price point entry level ‘mountain bikes’ with basic or no suspension that are mainly bought for riding to school or work or local recreation.
So what are the five drivers that we predict will keep the MTB sales boom going for at least the next season or two?
Driver One: Unprecedented Spending on MTB Parks is In the Pipeline
As we reported previously in this article there is currently over $100 million in approved government funding for various mountain bike parks across Australia. These projects range in status from under construction to still in planning stages, but with funding announced.
There is no doubt that more good places to ride equals increased sales. The poster child for this equation is Tasmania. You only have to read every Tasmanian bike store owners’ answers to our How’s Business column over the past year to see this. Every one of them, without prompting, has talked about how their MTB sales are up due to local MTB parks and trails opening.
Many mainland states and local governments are aware of the Tasmanian success stories and are lining up to become, ‘the next Derby’.
When will we reach ‘peak mountain bike’ where each new trail and park results in a diminishing level of return upon investment is yet to be determined, but we’re certainly not at that point yet.
Driver Two: Rapidly Improving Product Technology
Mountain bikes were already getting lighter and stronger thanks in part to carbon fibre becoming more mainstream in higher end models.
Suspension technology has also steadily improved and we now have highly professional suspension service centres well established in Australia that give consumers first rate service and peace of mind when making a major investment into a new MTB.
But then came e-mountain bikes, which are the fastest growing MTB sales sector of all. In the past, the key drawbacks of eMTB’s have been weight, cost and to a lesser extent, range.
Fortunately, all of these measures are rapidly improving thanks to new, more compact motors and better battery technology.
Far from being able to take all of the credit for this, the bicycle industry is like a bug that happens to have landed on the nose cone of a rocket just before lift off.
There are trillions of dollars in sales awaiting those companies who make breakthroughs in battery technology for which there are eager markets across everything from electric cars to electricity grids to every from of electronic device.
Every industry wants batteries with greater energy density and lower cost, the exact two characteristics that will also benefit eMTB’s.
So it’s not a question of if eMTB’s will continue to get better, only ‘how quickly?’
Driver Three: Economic Factors
You can break this driver down into two parts, supply side and demand side.
On the demand side, consumers have been greatly limited in how and where they can spend their money. For example, pre-covid in 2018-19 more than 10 million Australians took overseas trips spending $65 billion. Of these, 5.6 million trips were for overseas holidays, spending $43.2 billion. Overnight this has dropped to almost zero and until there’s a global, proven vaccine, allowing international border restrictions to ease significantly, that’s unlikely to change.
Consumers are not just restricted and saving money on overseas travel. There are billions more being saved on everything from sporting events to concerts that have been cancelled or restricted.
Buying one or more mountain bikes and heading for an MTB trail suddenly has a whole lot less competition for consumer time and money.
On the supply side, governments are desperate to get the economy moving again. Reviving domestic recreation and tourism, of which mountain biking is a key part, will help, so we can expect to see more funding and incentives to come.
Driver Four: Mental and Physical Health
Thanks to lockdowns, huge job losses and the general uncertainty around what will happen next, not to mention the growing death toll and fear of becoming ill, Australians have arguably not been under such collective pressure since World War II or the Great Depression.
We’ve already seen the UK government introducing funding for a scheme where doctors can prescribe cycling as a treatment for their patients, just like they usually would for a medicine.
Mountain biking is the ultimate escape into nature. It’s easy to socially distance and a perfect way to build both mental and physical health and resilience.
Therefore we expect official endorsement at all levels to further increase, on top of millions of individuals deciding for themselves that mountain biking is a great health option for them to pursue.
Driver Five: Increased Road Traffic and Cyclists Toll
Mountain bike sales appear to have taken market share from road bike sales. As MTB sales have grown, road bike sales have declined. No-one can say exactly why, but the sad reality is that our road are getting busier and more cyclists are dying on our roads.
In the 12 months to June 2020, 48 cyclists died on Australian roads, an increase of more than 40% on the 34 deaths for the previous financial year. At the same time driver fatalities declined by 4.7%, passenger deaths declined by 17.5 per cent over the same period, pedestrian deaths declined by 14.4 per cent and motorcyclist deaths declined by 5.4 per cent.
For every cyclist death there are many more injuries and for every injury, there are many more near misses and unpleasant experiences of harassment and intimidation.
These combined are enough to demoralise or even deter the most seasoned road cyclist, many of whom have turned to mountain biking (and gravel riding) for a safer escape.
Restrictions and consumer caution about useing public transport and flying have the potential to make our city and country roads even busier in the months ahead as lockdowns gradually ease.
Negative Pressures: Supply Chain and Recession
Against all these strong drivers for growth in MTB sales going forward, what could hold it back?
Clearly at the time of writing the number one constraint is lack of supply. Virtually every dealer we’ve spoken to in recent months has told us that they could sell more mountain bikes if they could get hold of more stock.
This is not just an Australian phenomenon. In the USA mountain bike trail counts are showing increases of between 100% and 500% and MTB sales have cleaned out all supply. It’s a similar story across Europe. So with all major markets screaming for more supply, we’re predicting that it will be at least mid-2021 before factories can fully catch up.
The other major potential threat is the overall health of the Australian economy. Unemployment is up and Jobkeeper and other programs are starting to be wound down. There have rarely been so many pressures and uncertainties surrounding our economy.
So far, our bicycle industry in general and mountain bike sales in particular have defied these negative pressures. Only time will tell for certain if this will continue,
We expect that the drivers for growth in MTB sales will collectively outweigh the negatives and that dealers can expect to see strong MTB sales continuing.